The Computable General Equilibrium (CGE) model could capture the full range of interaction and feedback effects among different agents in the economic system. This study analyzes the economic impacts of differentiated carbon reduction targets by using a two-region CGE model in Tianjin Municipal City of China (hereafter “Tianjin”). Firstly, based on a business-as-usual (BaU) scenario and seven proposed carbon reduction scenarios, this paper quantifies the macroeconomic impacts of different carbon reduction targets in both regions, especially the carbon reduction costs and industrial output. Furthermore, several typical industries in Tianjin are chosen to explore how their competitiveness is affected under different carbon allocation scenarios. The results show that compared with the BaU scenario, the Gross Domestic Product (GDP) in Tianjin would achieve the highest growth rate if the carbon intensity reduction target is set at 65% in Tianjin whereas 55% in the rest of China (ROC). Meanwhile, residents’ welfare loss in Tianjin will be the largest if carbon intensity reduction target in 2030 is set to be 65% in Tianjin and 75% in ROC. Also, the local pillar industries (including electronic sector and the metal smelting sector) would benefit from the carbon reduction policy, while the paper sector would be negatively influenced. Policy recommendations are raised, in which several factors should be fully considered, including development stages, resource endowments, technical levels and local environmental carrying capacity.

Climate change mitigation involves reducing fossil fuel consumption and greenhouse gas emissions, which is expensive, particularly under stringent mitigation targets. The co-benefits of reducing air pollutants and improving human health are often ignored, but can play significant roles in decision-making. In this study, we quantified the co-benefits of climate change mitigation on ambient air quality and human health in both physical and monetary terms with a particular focus on Asia, where air quality will likely be degraded in the next few decades if mitigation measures are not undertaken. We used an integrated assessment framework that incorporated economic, air chemistry transport, and health assessment models. Air pollution reduction through climate change mitigation under the 2 °C goal could reduce premature deaths in Asia by 0.79 million (95% confidence interval: 0.75–1.8 million) by 2050. This co-benefit is equivalent to a life value savings of approximately 2.8 trillion United States dollars (USD) (6% of the gross domestic product [GDP]), which is decidedly more than the climate mitigation cost (840 billion USD, 2% of GDP). At the national level, India has the highest potential net benefit of 1.4 trillion USD, followed by China (330 billion USD) and Japan (68 billion USD). Furthermore, in most Asian countries, per capita GDP gain and life value savings would increase with per capita GDP increasing. We robustly confirmed this qualitative conclusion under several socioeconomic and exposure-response function assumptions.